India’s overall spending on logistics contributes 13 per cent of its gross domestic product (GDP) — much higher than the sector’s share in developed economies. Despite multiple challenges here, DHL Global Forwarding sees a lot of growth from automotive logistics in the country. Christoph Remund, CEO, DHL Global Forwarding, told Hindustan Times that India’s emergence as a global components hub for small cars will also see increasing demand for logistical support. Excerpts:
On the automotive sector
We see the automotive sector as a growing market. Particularly in India, which is slowly increasing exports and becoming a global hub for component production for smaller cars. Auto sector alone will be providing about 10 per cent of Indian GDP by 2016. At least 4-5 of our global customers have come to us with requests to set up a logistics network in India.
On automotive logistics
It is difficult to ascertain a number. But yes, automotive is one of the sectors where we invest heavily. We are looking at investment in HR, IT solutions and facilities. Plans will materialise over the next six months.
GST is a welcome reform and expected to change the way manufacturing, warehousing and distribution are carried out in the country. It is both a challenge and an opportunity for automotive logistics. In fact our contract logistics groups are already working with customers to look into the effects of logistics in supply chains. The most likely scenario to emerge is that there will be less dependence on the hub-and-spoke model.
There is a need for continuous supply of well-trained manpower. Unfortunately Indian universities and academic institutes do not focus on logistics. At DHL, we train people internally and a lot of investment goes in it. Freshers are trained for at least 18 months in different sectors. We are now in talks with universities and training institutes for tie-ups to see if a curriculum for logistics can be created.